CCS Developers Seek to Cut Through Europe's Red Tape

Europe has theoretical capacity to store up to 500 gigatons of CO2 — equivalent to over 100 years of emissions, according to the Global CCS Institute, a think tank focused on carbon capture and storage (CCS). Unsurprisingly, oil and gas firms are positioning to leverage their strategic advantages. Over 40 European CO2 capture projects are in progress, but the continent still requires many more permanent geological storage sites to keep pace with capture demand. CCS developers say the EU and UK must improve support measures and reduce red tape to get projects off the drawing board. Here, we look at what stage the main players are at.

Global CCS Storage Resource Estimates (gigatons)

• Norway's Equinor lights the way ahead.

Non-EU member Norway is leading Europe’s CCS push, so it stands to reason that state-controlled Equinor is one of the most advanced among European majors on CCS, having been injecting CO2 into a saline aquifer at the Sleipner field offshore Norway since 1996, and Snohvit since 2008. Last November, the Equinor-led Northern Lights venture — Europe’s most advanced project — finished drilling two CO2 injection wells offshore Norway, confirming storage capacity ahead of start-up in mid-2024. Months earlier, the partners signed their first commercial agreement with Dutch fertilizer giant Yara for the cross-border transfer of CO2 for storage — the first such pact between two jurisdictions.

CEO Anders Opedal recently said that policy developments in Europe would strengthen the commercial potential for CCS — a key plank of Equinor’s broader decarbonization strategy. The company is targeting 15 million-30 million tons per year of CCS capacity by 2035. And it now has acreage with the potential to store around 30 million tons/yr of CO2 after last year’s award of the Smeaheia exploration license in the Norwegian North Sea.

In Belgium, Equinor and Engie are maturing the H2BE blue hydrogen project — a key building block for the open access hydrogen and CO2 subsea pipeline the Norwegian firm plans to develop with Belgian gas transmission operator Fluxys. The 1,000 kilometer (621-mile) pipeline could potentially transport captured CO2 from industrial clusters in Belgium and surrounding countries back to Norway. A potential second branch would link northern France at the port of Dunkirk.

• Germany's Wintershall is also tapping Scandinavia's potential.

In Germany, an amendment to the 1996 London Protocol, which prohibits marine pollution by the dumping of waste, must be ratified to allow CO2 to be sent abroad and stored under the seabed. That could pave the way for German independent Wintershall Dea and Equinor’s NOR-GE project, which aims to transport industrial CO2 emissions from Wilhelmshaven on Germany's North Sea coast for injection and storage off Norway.

“Norway is very clear that CCS will play an important role alongside the continued build-out of the E&P business," Wintershall CFO Paul Smith said recently. "That for us provides — given our business in Norway — a unique opportunity to really build out the front end of a carbon storage business,” Last year, Wintershall won its first CCS storage license, Luna, off Norway.

In Denmark, Wintershall’s Greensand project next month aims to start injecting CO2 from a Belgian industrial plant into the depleted Nini West oil reservoir following a bilateral cross-border agreement last year. By 2030, 8 million tons/yr could be stored in a final phase, equal to over 13% of Denmark's total annual emissions.

Wintershall aims to build a carbon management and hydrogen business that will potentially abate 20 million-30 million tons of CO2 a year by 2040, equivalent to 60% of CO2 emissions from the German steel industry, the largest in the EU. "We consider the next two to three years as a positioning phase for this business," said Smith. The company has a pipeline of over 15 projects, and some will inevitably fail, he emphasized.

• Shell, Harbour await UK government approvals.

Shell has one of the industry’s more ambitious global CCS targets, aiming to sequester 25 million tons/yr of CO2 by 2035. In Europe, in addition to a 33.3% stake in Northern Lights, the company intends to reach net-zero emissions at its Moerdijk petrochemicals park in the Netherlands by 2032, through hydrogen and carbon capture technology.

In the UK, the Shell-backed Acorn CCS and hydrogen project on Scotland’s east coast could benefit from a government commitment this month to spend £20 billion ($24 billion) over 20 years as part of a “clean energy reset.” Acorn, also backed by Exxon Mobil, UK independent Harbour Energy and CCS specialist Storegga, aims to decarbonize facilities such as the Grangemouth refinery, the St. Fergus gas terminal and Exxon’s Fife ethylene plant. It envisages a storage facility with a capacity of up to 10 million tons/yr by 2030.

The project has struggled to get off the ground. In 2021, the government rejected funding for Acorn in favor of two CCS schemes in northern England — HyNet (Eni, Essar and Ineos) and East Coast Cluster (BP, Equinor, Shell and TotalEnergies) in a first round of CCS projects to be given approval. Acorn was instead put on a reserve list. However, the government now plans to launch its delayed Track 2 CCS process later this month.

Harbour is among a handful of smaller firms looking to be nimble first-movers in the emerging CCS sector. In addition to Acorn, Harbour is developing the UK Viking CCS scheme (formerly V Net Zero), which will take CO2 from industrial emitters in the Humber region and store them in depleted gas fields in the southern North Sea. Viking alone could deliver one-third of the UK’s CCS target by 2030.

Harbour CEO Linda Cook called recently for a supportive regulatory framework rather than government funding, a commitment around the long-term liability related to the storage, and a simpler and quicker Track 2 process. That could lead to FIDs in 2024. Without that clarity, the company and its partners will have “tough decisions to make” about whether or not to continue investing, Cook emphasized.

• US major Exxon is making CCS inroads in Europe.

Exxon has not quantified its CCS ambitions, but it has staked a claim in several major European CCS hub projects to decarbonize its facilities. In the Netherlands, the 2.5 million tons/yr Porthos CCS scheme, which is targeting industrial emissions around the Port of Rotterdam, has run into permitting delays but, once approved, aims to convert Dutch North Sea gas fields into carbon storage sites.

Exxon has also thrown its weight behind a multi-stakeholder CCS scheme at the Port of Antwerp in Belgium, home to Europe’s largest energy and chemicals cluster. The project has the potential to halve CO2 emissions in the area. The US major and Total are separately exploring plans for a CCS chain to help decarbonize their facilities in Normandy’s industrial basin in northern France for storage in the North Sea.